India's ICICI Bank sees more rate cuts, easing credit
NEW DELHI, Nov 16 (Reuters) - ICICI Bank (ICBK.BO), India's second-largest lender, sees interest rates and credit easing further as inflation falls faster than expected, its chief executive said on Sunday.
Inflation in India grew the slowest in nearly six months in the week to Nov. 1, and analysts expect this would lead to further rate cuts by the central bank as more evidence emerges economic activity is slowing down.
"I think all of us will loosen our credit," K.V. Kamath told delegates at the India Economic Summit. "(Falling inflation) will give them confidence to ease."
"As the situation now is, as I see interest rates coming down, lenders will work in concert to ensure credit flow," Kamath said.
The Indian central bank has cut its key short-term lending rate by 150 basis points to 7.5 percent in two steps, as inflation eases from its August peak of 12.91 percent and as growth in Asia's third largest economy moderates.
Most state-run banks, including sector leader State Bank of India (SBI.BO), have cut rates by as much as 75 basis points after they met Finance Minister Palaniappan Chidambaram earlier in the month and promises to follow up on the central bank's moves.
When asked by when lending rates could come down by 200 basis points, Kamath said: "We're talking of at least 3-6 months."
Inflation in the week to Nov. 1 came in at 8.98 percent, falling from 10.72 percent in the previous week, and the decline was steeper than most analysts expected. But industrial output growth in September, the latest available, has slowed to 4.8 percent. (Reporting by C.J. Kuncheria; Editing by Hans Peters)
